What Urban Chinese Are Buying on Credit

4/22/2013 4:23AM

As China’s middle class grows, so does their debt. Shaun Rein from China Market Research talks about what Chinese consumers are buying with the 320 million credit cards currently in circulation in China.

This transcript has been automatically generated and may not be 100% accurate.

I ... the the ... as Asia's Middle Class Coates said today is the amount of debt is accumulating I'm Deborah con joining me now is Shaun rein ... them at China Market Research in Shanghai ... my son is so ... here's the list is talk about it I know it's obviously has that of quickly growing rapidly growing middle class ... especially in the urban areas ... of the ten years ago ... not a lot of people had a credit card is that right and today I mean just how many people are paying and panic ... three years ever to run ... ten years ago very few Chinese ... on a credit card in two thousand and five they're only about thirteen point five million credit cards in circulation ... we estimate that numbers can ago to three hundred and twenty million by the end of two thousand and thirteen ... so one of the major problems that of stops ... on consumer from going on by lunchtime it was the right of access to credit cards but really as we've seen in the last five years ... credit card companies issuing cards to consumers especially younger ones are willing to buy on credit ... the cayenne sale and people in the same people more people are buying on credit are they making big purchases one of the spending have it's ... um as the middle-class gratis ... one of the key areas is the middle class in China and really throughout Asia actually tons be a lot younger if you look in Indonesia and Vietnam over fifty percent of the population is under the age of thirty ... cities younger consumers in China and elsewhere are ... things like clothes cosmetics she eased and ... that the rise of credit is really unlocking the purchasing power which is why were Ballard bullish on Asian consumer over the next five years ... across even buying of ... gifts if you look five years ago he walked auto dealership ... probably about eighteen ninety percent of people are buying their cars one hundred percent upfront in cash ... but literally trash they're bringing in bags of cash to buy us ... now we are starting to see last week as that of BMW and Toyota dealership shot high ... and both of them are really pushing low interest rate loans ... and we think that's can help to fuel on yet more current sought to China because even when you have BMW switchers starting about fifty sixty thousand dollars ... people are buying credit ... ok what about Baghdad Nenad people's spending at this point in time are they spending too much ... on for any signs that that that you know that there could be consumers can be accumulating bad credit ... other potential for both the yuan you could see an issue in China are rising like in the nine states bumping up the next twenty thirty years ... and one of the reasons is that the credit limits are still very low ... on one of the largest limits gets about twenty thousand US dollars we actually interview Chinese billionaire recently ... at his credit when it was twenty thousand US dollars year on a Chinese bank even though his international American Express card spends over one million ... saying that ... she where consumers are willing to buy on credit they're not always able to pay back their credit card bills every month but China has won the highest credit card were all rates in the world about what it hopes to keep under the age of twenty eight ... but because of very sure credit limits I don't see a major debt time bomb happening anytime soon ... and cake thanks Fran much time enchanting as from Shanghai a ... for more on that star a pink added Avista dot com I'm Deborah con ...